EU trade chief says WTO talks in trouble

WTO talks were in peril Friday with the EU trade chief saying they were "going backwards," and cotton, banana and sugar growing nations threatening to reject any trade deal that failed to protect their farmers. "It is hard to see where progress can be achieved in Hong Kong if the talks continue in this direction," EU Trade Commissioner Peter Mandelson said. "The level of ambition, if anything, is going backwards."

The Group of 77 African, Caribbean and Pacific countries, many of whose populations are subsistence farmers relying on crops such as sugar, cotton and bananas, demanded safeguards for commodity growers and continued preferential access to European markets.

Their objections were the latest blow to the WTO talks that have made barely any progress toward agreeing how much to cut trade barriers in any of the three main areas: agriculture, manufactured goods and services.

Since the 149-nation WTO operates by consensus, the controversy could undermine the outcome of the six-day gathering that wraps up Sunday. "We will not be a party to any consensus that that does not recognize our right to grow bananas," said Charles Savarin, trade minister of Dominica. "We must preserve our traditional access to the EU markets."

The European Union's system of tariffs and quotas favors Caribbean and African banana producers over large-scale growers in Latin America, preferential treatment the WTO has ruled violates world trade rules.

Caribbean and African countries say ending the preferences could destroy their domestic banana industries, which are mostly small-scale family farms. But Honduras has threatened to reject any global trade deal that preserved the preferences.

Warning that trade talks risk failure, a broad group of nations including India, Brazil and Australia urged fellow trade delegates to re-focus on resolving the "core" issue of farm trade, where talks have been stalemated for months. Talks so far have spent considerable time discussing aid proposals for the world's poorest countries.

The United States and EU are holding up the talks by failing to offer more cuts in government support for their farmers, members of the Group of 20 leading developing nations and the Cairns Group of major food exporters said in a statement.

"It is time for them to display leadership," said the groups, which represent 27 nations and more than half the world's population. "There are many hundreds of millions of people across the world living in poverty-stricken countries who are loooking to us to improve their opportunities by negotiating better market access," said Mark Vaile.

A senior American trade envoy directly involved in this week's closed-door discussions, meanwhile, said talks were "being held hostage to a failure of our developed country partners to come forward with ambitious offers to agricultural market access" _ a swipe at the EU's refusal to match a U.S. offer to cut duties used to protect farmers from foreign competition. Mandelson, lashed out at that criticism, saying the EU would not alter its stance, which includes offering an average cut of 46 percent in farm tariffs.

"We are going to stick to our position," he said, adding that developing nations seemed to expect the EU to settle for fewer opportunities in industrial trade while agreeing to make more concessions in agriculture. "In other words, pay more to get less in return," he said.

Negotiators agreed on a draft text for a package that would give 32 of the WTO's least developed nations duty-free, quota-free access. But in a step back, the revised draft includes no specifics on when the measures would be implemented or what products would be covered, according to a copy of the text obtained by the AP on Friday.

The United States and Japan both had cited concerns, Washington about textile imports from Bangladesh, Tokyo about rice imports, delegates said. The issue of duty-free and quota-free access is a key component of the Doha round, which was launched in Qatar's capital in 2001 and is meant to address the concerns of developing countries, who say they lost out in previous WTO negotiations, reports the AP. I.L.